Pennsylvania Gov. Josh Shapiro said during his budget address Tuesday he wants the state to become more competitive for both businesses and workers by raising the minimum wage.
Shapiro said the state is falling behind surrounding communities like New Jersey, Delaware, Maryland and New York — all of which are already on track for or have enacted $15 minimum wage laws.
“It’s anticompetitive and it’s hurting our workers,” he said. “Pennsylvania workers living in border counties would rather drive into another state for work so they can earn a higher wage than take a job at home.”
It’s been 15 years since the minimum wage increased for workers in Pennsylvania when the federal government finished its step-increase from $5.15 per hour in 2007 to $7.25 in 2009.
“That’s a shanda,” Gov. Shapiro said, using the Yiddish word for shame or disgrace.
Nationwide, 30 states and many major cities have minimum wage laws higher than the federal standard — but not in Philadelphia, which lacks the legal authority to raise the minimum wage.
The Democratic-controlled Pennsylvania House passed a bill last year that would increase the state’s minimum wage to $15 an hour by 2026. But it has not made it out of committee in the GOP-controlled state Senate for a potential vote.
Shapiro said he’s “encouraged to see the comments of Senate leaders who’ve shown a willingness to engage on this issue.”
The last time the Pennsylvania Senate seemed to agree to raise the state’s minimum wage to $9.50 — through a similar gradual increase by 2022 — was in 2019, but the effort failed after being blocked by Republicans.
Keystone Research Center, a Harrisburg think tank, released a report estimating 776,000 workers statewide could see a direct increase in pay if the minimum wage was higher. However, another 568,000 workers are estimated to see their pay increase as a result of the changing market landscape.
Of workers who would benefit from a higher minimum wage, 84% are adults — not teenagers. More than half are between 20 and 39 years old, according to the report.
In Philadelphia County, about 20% of the workforce, or 43,000 people, could benefit, according to the Keystone Research Center.
Some of its findings contradict a Pennsylvania minimum wage advisory board report that estimated there were 74,400 workers statewide earning minimum wage or less in 2020. But that same year, there were 693,100 workers earning between $7.26 and $12, according to the board’s report in 2021.
The Chamber of Commerce for Greater Philadelphia supports the $15 an hour minimum wage as it “means to address devalued wages and promote inclusive growth in our region.”
The most prominent argument against minimum wage hikes is the burden on small family-owned businesses.
“I cannot support a bill that would put a local family restaurant out of business and, along with it, the many employees who make a living at their three locations,” said State Rep. Katie Klunk, a York County Republican, who argued against the House Bill in June 2023.
But Democrats retort there’s enough in state coffers to offset any hardships.
“We have enough resources in this commonwealth where we can give small businesses tax credits to help them afford getting people to the minimum wage,” said State Rep. Justin Fleming, a Democrat who serves Dauphin County.
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